ESTATE agents in York have reported their busiest four weeks of the year, defying the recent rise in interest rates.

Surveyors across North Yorkshire are reporting a buoyant market as demand for high-quality properties continues to outstrip supply, according to a survey published today.

But the Royal Institute of Chartered Surveyors (RICS), which published the findings, believes that the current price rises could prove to be unsustainable if interest rates do not rise further.

It also claimed that buyers could become frustrated by a lack of choice if more properties do not come on to the market in the new year.

Edward Waterson, of Carter Jonas in York, said: "We have just had the busiest four weeks of the year, with the market showing extraordinary resilience. Prices remain the same, instructions are slightly down and stocks are beginning to come under pressure."

Estate agents in York and Malton were among 61 per cent more of surveyors who reported a rise rather than a fall in house prices for the three months to October.

The number of unsold properties fell in October - the fifth consecutive monthly decline - with new seller instructions coming to a standstill in Yorkshire and the Humber after firm increases in recent months. Country houses continue to be the worst performers, with only five per cent more surveyors reporting a rise than a fall in prices. A severe shortage of key types of property in sought-after areas has led to tough competition nationally.

Christopher Wilson, of Boulton and Cooper, in Malton, said: "The scarcity of available property continues to drive prices, particularly on individual well-located homes."

RICS housing spokesman and chartered surveyor, Ian Perry, said: "Competition is increasing for middle market housing in desirable areas across the country where we are seeing the biggest price rises.

"Gazumping may be reappearing, particularly at the top end of the market in London. But in other areas of the market sellers' price expectations are proving to be unrealistic."

Updated: 14:17 Tuesday, November 18, 2003